The state acquires 10% of Telefónica’s capital and becomes the first shareholder

The state acquires 10% of Telefónica’s capital and becomes the first shareholder

MadridLess than two months. That’s how long it took SEPI, the Spanish government’s investment arm that relies on the Finance Ministry, to acquire 10% of Telefónica’s capital since it announced its first share purchase at the end of March. With the latest share acquisition detailed on Monday afternoon through the National Securities Market Commission (CNMV), the country is now officially the first shareholder in teleco Spanish 27 years have passed since privatization.

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Behind it will be the Saudi STC Group Fund with 9.9% of the capital. However, Arab Telecom currently holds 5% of Telefónica’s capital, although it retains 4.9% through financial instruments. In fact, we must remember that the Spanish government movement was born, precisely, before the entry of the Saudis into the company headed by José María Álvarez Ballete. The goal was for them not to have the main role in contributing.

During these two months, the Spanish government, through the Ministry of Finance, made direct transfers to SEPI. The funds that are part of the state’s general budgets for 2023 (those currently extended) came from financial contributions. In total, the government disbursed €2,284 million public (acquiring a total of 567,016,696 shares at an average price of €4.02 per share). This figure is slightly higher than what it cost STC Group to acquire its shares because since the Spanish government announced its intention to acquire 10% of the capital, Telefónica’s value on the stock market has risen slightly. In fact, this is the main reason behind the demand for buying stocks. “We want to do it in the shortest possible time,” said Spanish government spokeswoman Pilar Alegría a few days ago.

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Spanish hard core

While the Spanish government is now waiting for a move by the STC Group (although it needs permission from the executive branch to be able to acquire the 4.9% stake it allocated to Telefonica), the Ministry of Economy stated that it has not yet obtained a “request on the table.” Integration of a solid core of Telefónica shareholders that seeks to ensure the “Spanishness” of the company, as well as its strategy.

Apart from SEPI, CriteriaCaixa, which has become stronger after the acquisition of 5% of Telefónica’s capital, plays a role in this solid position. Also BBVA with 4.87% and CaixaBank (2.510%). The other major shareholder is BlackRock with 4.4% of the capital but no representation on the board of directors.

Signed by Real Madrid

Despite everything, SEPI has always stood for its “enduring mission”. “It will allow Telefónica to be provided with greater stability for shareholders to achieve its objectives, contributing to the preservation of the strategic capabilities of a strategic company of national interests due to its leadership in the telecommunications sector and its industrial capabilities, determinants in areas such as security and defence,” the General Authority said.

In order to defend these interests, the Spanish government contracted the economist Carlos Ocaña Urbis. This “digital guru” will be a director at Telefónica representing SEPI after the “voluntary” departure of director Carmen García de Andrés. In addition, the Minister of Digital Transformation, José Luis Escrivá, has not closed the door on the ability to request a second chair in the Council.

Urbis is currently one of Florentino Pérez’s strongmen and is part of Real Madrid’s executive committee. He has experience in digital and technology consulting, and in fact has two published works related to this field. Among them, the current head of the Spanish government, Pedro Sánchez, was the director and Ocaña the co-author.

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